Indian Oil's December quarter profit more than doubles on inventory gains

State-run refiner Indian Oil Corp Ltd's quarterly profit more than doubled, as the value of its inventory increased on the back of higher crude prices and margins rose at its petrochemical business.

An inventory gain is booked when oil prices rise when the company is refining and shipping petroleum products. Brent crude prices jumped 26.50% in the December quarter.

IOC, the country's top refiner, posted net profit of 49.17 billion rupees ($673.75 million) for the quarter ended Dec. 31, compared with 23.39 billion rupees a year earlier. Revenue from operations rose to 1.47 trillion rupees.

India's oil consumption has seen a V-shaped recovery since Covid-19 related restrictions were lifted and oil product sales are expected to reach pre-Covid-19 levels in the last quarter of financial year 2020-21, Chairman S M Vaidya said on a conference call.

India's crude oil processing in December registered its first year-on-year gain since February 2020. Crude oil imports soared to their highest in nearly three years in December, as refiners strived to meet the surge in fuel consumption.

Indian Oil's refining capacities were higher in the December quarter, compared to last year, Vaidya said.

Average gross refining margin for April 2020 to December 2020 stood at $2.96 per barrel, against $3.34 per barrel for the same period last year, IOC said.

The company also declared an interim dividend of 7.50 rupees per share.

Shares of IOC rose as much as 4% after results.

IOC, along with subsidiary Chennai Petroleum, controls about a third of the country's five million-barrels-per-day (bpd) refining capacity.